BA Boeing Co

By Paul Page 

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Some shippers aren't ready to board the CSX Corp. service-recovery bandwagon. Agricultural giant Cargill Inc. told federal regulators it has had to shutter factories as recently as this week because of rail problems and chemical company Chemours Co. says CSX's breakdowns have cost the company more than $1 million. Their outlook clashed with CSX Chief Executive Hunter Harrison's contention at the Surface Transportation Board that service problems that peaked over the summer have been solved, the WSJ's Paul Ziobro writes, keeping clouds over Mr. Harrison's bid to remake the freight carrier under Mr. Harrison's "precision railroading" vision. CSX wants clear track to shut rail yards, trim operations and redirect trains but the shippers want the regulators to clamp down and require CSX to notify then them when it changes schedules and routes. Mr. Harrison insists trains are running faster and complaints from customers are dwindling, but the ongoing clamor suggests regulators will keep a close watch on the railroad.

A scandal at one of Japan's biggest aluminum manufacturers is rippling through automotive supply chains. Companies including Toyota Motor Corp. and Nissan Motor Co. are trying to identify vehicles containing aluminum supplied by Kobe Steel Ltd., the WSJ's Sean McLain reports, after the company admitted it had doctored paperwork on product quality. The car makers believe the issue is restricted to plants in Japan, but Kobe Steel also supplied components to Boeing Co. and General Motors Co. says it's checking on the potential impact on parts in its cars. They're coping with a problem that can spread across industrial operations when one company becomes a top supplier to global manufacturers, forcing the buyers to track supplies across far-flung factories. Kobe Steel has some 200 customers world-wide for the forged aluminum pieces that are at the center of the scandal and are used in vehicle suspension systems.

Delta Air Lines believes it can fly above a budding U.S.-Canada trade battle. The passenger airline hopes to start taking delivery of planes next spring from Bombardier Inc., the WSJ's Doug Cameron reports, but doesn't expect to pay the hefty tariffs that U.S. trade officials are proposing on the new Canadian jetliners. The trade dispute has escalated since the U.S. upheld a Boeing Co. complaint that Bombardier is building its regional jets with unfair government subsidies, and it's now embroiled the U.K., home to a big Bombardier plant. The case also highlights the complications and conflicts in trading relationships when they involve foreign suppliers and domestic operators. Delta Chief Executive Ed Bastian says Boeing's case is weak and that the airline doesn't expect to pay tariffs that could reach 300% of the purchase price of the CSeries planes, although deliveries could be delayed as the airline works through the issues with Bombardier.

ECONOMY & TRADE

Talks to remake the North American Free Trade Agreement are resuming under growing concern from business groups. The Trump administration is honing a strategy to water down the pact and reduce its influence on companies, the WSJ's Jacob M. Schlesinger reports, even as the head of the largest U.S. business group is setting off "alarm bells" over plans he says would diminish cross-border trade. Thomas Donohue, president of the U.S. Chamber of Commerce, issued the warning from Mexico City as he sought to tighten cooperation with Mexican government and business leaders. The U.S. stance calling for provisions such as a "sunset" clause on the trade deal that would raise uncertainty for businesses over whether the trade pact will even last. The administration is trying to change economic calculations for companies as they consider where to place manufacturing and investment, and potentially shift today's cross-border supply chains into the U.S.

QUOTABLE

IN OTHER NEWS

Wildfires across Northern California have killed at least 21 people and destroyed at least 3,500 homes and businesses. (WSJ)

Alibaba Group Holding Ltd. will nearly triple spending on research and development to keep pace with Western rivals such as Alphabet Inc. and Amazon.com Inc. (WSJ)

Beijing is pushing big tech companies, including a unit of Alibaba, to give the state a stake in them and a direct role in corporate decisions. (WSJ)

Kroger Co. is considering selling its convenience stores as the grocer battles Amazon.com Inc. and other new competitors. (WSJ)

General Electric Co.'s Baker Hughes recently held takeover talks with energy-services company Subsea 7 SA that broke down over price. (WSJ)

Food and Drug Administration Commissioner Scott Gottlieb says the agency is committed to making food packaging more informative. (WSJ)

Women's clothing retailer J. Jill Inc. slashed its quarterly outlook, projecting same-store sales to fall 3% to 5%. (WSJ)

Third-party merchants on Amazon.com Inc. are expected to start collecting state sales taxes on Dec. 1 under a partial amnesty. (Bloomberg)

U.S. carriers Crowley Maritime Corp. and Trailer Bridge added capacity to Puerto Rico to get more relief supplies to the hurricane-ravaged island. (Journal of Commerce)

U.S. trucking analysts are forecasting significant rate increases for shipping customers. (Fleet Owner)

Argentine textile groups are adopting new standards for sustainable wool production. (Sourcing Journal)

French manufacturer Dassault Aviation SA is considering building its next business aircraft in India. (Industry Week)

The parent of China Cosco Shipping expects to show a $410 million net profit in the first three quarters of the year. (Nikkei Asian Review)

A violent storm in South Africa blew a large Mediterranean Shipping Co. container ship into the Port of Durban harbor, shutting the port. (The Mirror)

Amazon is considering ways to deliver goods to the trunks of cars, following tests DHL and Daimler AG have conducted in Germany. (CNBC)

FedEx Corp. will build a small-package distribution center south of Indianapolis with the help of a $17.2 million tax break. (Indianapolis Business Journal)

Three-quarters of business-to-business companies in a survey say their customers want e-commerce options for buying goods. (Internet Retailer)

Armstrong & Associates expects e-commerce revenue for third-party logistics companies to grow at a 15.7% annual rate through 2020. (Logistics Management)

California is changing highway rules to allow for the testing of self-driving cars. (Commercial Carrier Journal)

ABOUT US

Paul Page is deputy editor of WSJ Logistics Report. Follow him at @PaulPage, and follow the entire WSJ Logistics Report team: @brianjbaskin , @jensmithWSJ and @EEPhillips_WSJ. Follow the WSJ Logistics Report on Twitter at @WSJLogistics.

Write to Paul Page at paul.page@wsj.com

(END) Dow Jones Newswires

October 12, 2017 07:10 ET (11:10 GMT)

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